Blogging for dollars

If recent rumours are to be believed, AOL is getting ready in the next month
or so to add blogging to the home-page services it offers users.

It is a sign of how far these regularly updated pages of web links with
personal comment have come in the past five years.

When blogs first started, these real-time online diaries were the preserve of
the techno-literate. The advent of easy-to-use publishing services such as
Blogger, launched in August 1999, began to bring it into the mainstream.

In the past year or so, blogging has bloomed, becoming one of the most
interesting and popular online phenomena.

It is mass market enough for AOL, but still innovative, thanks to software
such as Moveable Type, which adds feedback and networking to the basic formula,
turning weblogs into places where ideas can be developed by groups of
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Weblogs are one of the few things online still capable of generating media
buzz and bucks. The libertarian blogger Glenn Reynolds turned himself into a
marketable political pundit via his hugely popular blog (instapundit.com) and
now appears on the news cable channel MSNBC. United States-based right-wing
British blogger Andrew Sullivan (andrewsullivan.com) recently netted about $US79,000 ($133,000) in
donations from his readers during a "pledge week" in which he appealed for funds
to keep his site running.

Given Sullivan's success, there are signs that the business world beyond AOL
is beginning to take a serious interest in weblogs.

A growing number of entrepreneurs, media types and marketers have taken up
blogging, in all senses of the word. And as they crank out their own daily
contributions and links, they are starting to see it as a way to reach out and
research opinion formers, as a lesson in online media and as a place they might
eventually make a little money.

Leading the charge is New York-based Briton Nick Denton (nickdenton.org), whose previous credits
include the dotcom networking event First Tuesday and the online news aggregator
Moreover.

In August Denton launched Gizmodo (gizmodo.com), a blog targeted at gadget
freaks. Recently, he followed up with Gawker (gawker.com), a blogging mix of upscale party
gossip and New York City news. Next in line is a "high-class porn site", a
"travel-related site" and "a general high-end consumer buying guide", all using
the blog format.

How does Denton plan to turn a profit? Affiliate marketing, advertising and
syndication. Gizmodo features a lot of www.Amazon.com affiliate links. Once site
traffic grows (it gets about 53,000 page views a week), Denton will look for
advertising and sponsorships from the likes of Sony and Apple. He also hopes to
generate revenue from syndication to other online sites and print publications.

Gawker "doesn't have an affiliate program to plug into, like Gizmodo", says
Denton, so the plan is to build traffic, then target real estate companies and
luxury goods advertisers.

"There's absolutely nothing new or original about the revenue model here," he
says.

Given its lack of originality, why does Denton think he will succeed? The
market is more mature, he says. People are used to spending more time (and
money) online. Amazon pays its affiliate marketers better commissions. "But the
main difference is on the cost side," he says.

Denton says a site such as Gizmodo costs between $1000 and $2000 a month to
maintain and is run by a journalist and a designer. "Start-up costs were
minimal, at around $US2000 for the initial set-up, plus $US150 for the Moveable
Type software the site uses," he says.

Clearly, Gizmodo and Denton's other sites will not be running up huge debts
as they attempt to build a readership.

"Some of these new online media ideas are small but potentially profitable
little businesses," Denton says.

One name for this slimmed-down approach to online publishing is "thin media".
Denton's label of choice is "nanopublishing", a term coined by Jeff Jarvis, head
of content, technology and strategic development for Advance, part of the
Newhouse media group that owns Conde Nast, among other things.

In the past, Jarvis started Entertainment Weekly. Now he is a committed
blogger (buzzmachine.com), and his
company has put its money where his mouth is; that is, in Pyra, the company
behind Blogger.

For Jarvis, blogging is a source of audience-generated content. "Forums on
such topics as recipes and high-school wrestling bring in up to a third of our
traffic," he says. "So we value this content. We saw blogging, early on, as a
potential for new audience content," he says.

Advance is planning three or four blogs on its Masslive.com site (a local
portal serving western Massachusetts). The idea is to get people in the
community to create local weblogs on topics such as local sports.

Though for the most part he is operating at the other end of the scale to
Denton, Jarvis is optimistic about his approach.

"Nanopublishing will not replace magazine publishing or mass media," he says.
"It is a new opportunity. It won't make money for political punditry or for the
diaries of college students. But it will work for gadgets and sex and special
interests such as disease - imagine a great weblog for diabetics - because it is
so cheap to publish."

Denton is working on other weblog-based business ideas, in particular
something called the Lafayette project: an aggregator that would help people
keep up with the ever-increasing range of blogs, possibly by pulling together
their choice onto a single, regularly updated newsfeed-style page. "It's all a
bit vague at the moment," he admits.

Denton is sensitive to the charge that he is "commercialising" blogging.
"That's not the right word," he says. "I'd like to bring weblogs to a broader
audience because I think most media is pretty boring."

Other business types have also experienced criticism as they set up shop in
the blogosphere.

Some bloggers, however, are excited by Copeland's planned ad network for
blogs, currently being tested.

"Blogads allow advertisers to tap into the passionate audiences," Copeland
says. "Blogs are where opinions get made these days and advertisers need to
position themselves accordingly. Advertisers can create flexible ads (text
and/or image), target very select audiences and even solicit comments about
their ads."

Even if advertising money does migrate to the web, it is doubtful whether
there would be enough to support that many bloggers. Many analysts have
suggested that weblogs have made publishing online so easy that they have made
it impossible for all but the leading sites to have any chance of making
money.

The line taken by blogging business types is similar to much that was said
about personal homepages in the mid-1990s. There was much talk about taking on
big media, about the most popular homepages turning a profit and there was an
advertising network aimed at these smaller sites called Link Exchange.

Copeland prefers to compare his site to eBay. Blogads, he says, will "enable
a community of like-minded advertisers and publishers to trade with each other
cheaply and efficiently". The idea is to "translate the key 'metric' where blogs
excel other media producers - passion".

Both Copeland and Denton present themselves as blogging enthusiasts, not
profiteering invaders, stressing that business could learn a lot from the
blogosphere.

"Other businesses could learn a bit about marketing," says Denton. "It's
about using a weblog form/tone to market to people in a less offensive way -
more like a conversation than a pitch."

Other companies are trying to bring blogging to the business world in a more
practical way. Userland Software (userland.com), the company behind Radio, a
popular weblog publishing tool, has been trying to sell blogging to
businesses.

Over the past year, Userland president John Robb has talked about the k-log,
a weblog used within a company to manage knowledge. The idea is that blogs can
help a business present information and develop new ideas. They can bring out
and spread the expertise within a company.

Sense Worldwide, an innovative London-based research outfit, does new product
development and trend tracking for various big companies. Sense has assembled a
global network of about 860 "creative" people, called "sensers", who are
encouraged to swap ideas via events and the company's online discussion
forums.

The company plans to move to a blog model/look and feel for its Senser
network and turn its homepage (senseworldwide.com) into an open blog.

Sense's Jeremy Brown says the idea is "not about looking cool, it's about
what's useful". The Sense homepage blog may draw in new people who can help with
the Sense network.

Other more straightforward business research companies, such as the US-based
Jupiter Research, are using weblogs in a more conventional way to promote
company ideas and show off their knowledge.

Indeed, the anarchic fluid nature of blogging may deter most business people
from entering the field. Those who are keen point out that most blogs will
remain personal, driven by obsessions and enthusiasms. Most will not make any
money.

But as blogging goes mainstream, thanks to the likes of AOL, they plan on
playing a careful game.

"Ninety-nine per cent of bloggers won't make money," says Copeland."But when
we've got 10 million bloggers a couple years from now, I'm confident that
100,000 of them will be uniquely valuable to advertisers."